jueves, 6 de diciembre de 2012

Todays consumption, Boskin Commision and Pensions

Some weeks ago I went to visit a friend of mine
from the high school, Paco Caballero, he is an entrepreneur, and managed his
own telecom office.
We were talking and he said something very interesting, in our day, with the
crisis unemployment, and so on so forth, everyone wants a iphone or other smart
phone, everyone.

Currently we are facing a deep crisis; however
people do not leave to buy luxury goods. But what is expected to happen with
the consumption pattern in such cases, first it is not the first time, so we
have another ones like the cases of Argentina at the beginning of the century and what economist observe is that
people buy less but go shopping more often, it means that people expend more
time comparing products and prices, they get the most out of their money.

But what happens with the smart phones, well
they are a product which combines many other, and their election could be more
rational than we can think at first glance, because they represent a new set of
opportunities, they are a new technology so we cannot compare properly with
previous ones good. This is exactly one of the reason uses in the Boskin Commission to warn about how we consider the
purchasing power though time.The Boskin
Commission studied the possible bias in the computation of the Consumer
Price Index (CPI),
which is normally use to reevaluate the salaries and the pensions, however
these authors think that CPI should not be use because there are things like
changes in technologies and changes in the pattern of consumption which affects
the ways CPI is calculated thought the time. Although the Boskin Commission
worked with data from UUEE it is easy to understand that affect to the whole
world, and they pointed out that the CPI were positive bias, meaning that the
CPI is a bad or unfair, indicator of the increase cost of leaving. Therefore,
we should generate other indicator to do it. Something curious is that Boskin
Commision estimate that the increase of cost of living was overrated around a
50%.

If we consider this ideas seriously, we can
check the data and see that in our days, where pension are reevaluated taking
CPI as indicator is unfair, and also that the salaries which are increasing
half of the CPI are just increasing in an appropriate way (introduce reference),
or the way more fair.

So I disagree to use the standard CPI to
increases salaries, costs or pensions, and we should take advantage of this
moment to do it a new and healthy custom for our future competitivity.